DoD issued a final rule on April 26, 2022, amending the FAR to support the Small Business Administration regulation of including overseas contracts in agency small business contracting goals. The final rule is effective May 26, 2022.
In the ASCBA Case 61691 Doubleshot, Inc. July 19, 2022 Decision, the Board supported what we believe is the correct reading of the records retention requirement under the FAR related to Cost-Reimbursable contracts. FAR 52.215-2, Audit and Records, requires contractors to make available until 3 years after final payment or any shorter period specified in Subpart 4.7. FAR 4.705-2(b) limits the required retention period to 2 years from the end of fiscal year for pay related records (e.g., timesheet or cards). So provided you submit your Incurred Cost Submission (required by FAR 52.216-7, Allowable Cost and Payment Clause) on time, you only need to maintain any of the records listed in FAR Subpart 4.7 for the time period set forth in that section of the FAR.
Schedule I is the most important part of the Incurred Cost Submission and is the single area of great interest for the Government and its auditors. This VLOG will briefly explain the Incurred Cost Submission, the importance of Schedule I, and how to resolve potential issues.
Yes, they are! Did your company make it through its year-end and closing of last year’s books? If so, hooray! But is it really over for those that have Government cost-type contract billings? Not really. OK, as the Federal Acquisition Regulation (FAR) 42.704, Billing rates, allows interim payments through contract performance with the intent of making the contracting officer or contract auditor approved provisional billings rates as close as possible to the expected final indirect rates. This allows you to bill your costs throughout the year of your cost-type Government contract billings. Now that you know what the year-end indirect rates really are, there is one more thing to do: adjust the provisional indirect billing rates to actual rates in a Public Voucher (Standard Form 1034). Those year-end indirect rates should be net of any unallowable costs in FAR Part 31, Contract Cost Principles and Procedures. Sounds easy. It really should not be that difficult.
Topics: Compliant Accounting Infrastructure, Contracts Administration, Defense Contractors, DFARS Business Systems, Cost-Type Contracts, DCAA Audit Support, Government Regulations, Federal Acquisition Regulation (FAR)
Have you considered populating the contracts module in Unanet with your data, but haven’t taken the time to do it yet? Let’s talk through the benefits of using the Contracts module.
There seems to be a lot of questions and misconceptions about purchase orders and subcontracts. Is there a difference? When is it appropriate to issue either instrument?
Government Contractor Purchases below the Micro-Purchase Threshold Require NO Documentation
This is a common misconception within the GOVCON community. While the expectations are clearly less documentation and effort are required than that of a larger dollar value purchase, there is not a magic threshold at which NO documentation of the fair and reasonable price is allowed.
Topics: Compliant Accounting Infrastructure, Incurred Cost Proposal Submission (ICP/ICE), Contracts Administration, Defense Contractors, DFARS Business Systems, Cost-Type Contracts, DCAA Audit Support, Contractor Purchasing System Review (CPSR), Government Regulations, Federal Acquisition Regulation (FAR)
The Government runs away to fight another day and another day.
What is this Groundhog Day?
L3 Technologies, Inc. (L3) takes the Government to task for “challenging both indirect and direct costs paid to L3 on several government contracts for certain years.” During the long-drawn-out process of the litigation, “the government apparently thought better of its claims and withdrew them in toto and represented it would make no further claims on the contract years in question.” L3 opposed, the dismissal seeking either summary judgment in its favor or that the Board “keep the appeals live so that it can obtain a victory that, it believes, would preclude its suffering similar government claims in other contract years.” No such luck, the Board granted the government’s motion and dismissed the appeals.
All we can hope is that someday the fox will get the gingerbread man (aka the Government) and this Groundhog Day nightmare will stop.
 Armed Services Board of Contract Appeals (ASBCA) Case Nos. 61811, 61813, and 61814
 Fancy Latin word for completely.
Topics: Incurred Cost Proposal Submission (ICP/ICE), Contracts Administration, Defense Contractors, Cost-Type Contracts, DCAA Audit Support, Government Regulations, Federal Acquisition Regulation (FAR)
Lockheed Martin raised a great question to the ASBCA as to “whether the Fly America Act, 49 U.S.C. § 40118 (FAA) and Federal Acquisition Regulation (FAR) 52.247-63 only apply to direct personnel performing direct work on covered contracts, or also applies to indirect personnel or indirect travel.” The Board declined to hear the case as there was no “live dispute” at hand.
 Armed Services Board of Contract Appeals Case No. 62377
Topics: Compliant Accounting Infrastructure, Incurred Cost Proposal Submission (ICP/ICE), Contracts Administration, Defense Contractors, Cost-Type Contracts, DCAA Audit Support, Government Regulations, Federal Acquisition Regulation (FAR)
Below is a novel thought, uttered in 1911 by the President of Columbia University, that may be equally true today:
I weigh my words when I say that in my judgment the limited liability corporation is the greatest single discovery of modern times. Even steam to electricity are far less important that the limited liability corporation, and they would be reduced to comparative impotence without it.
 Corporate Law & Practice (Practicing Law Institute, 2nd Ed. 1999) at p. 11.